Sky Blog
Few types of behavior attract as much attention in corporate and securities law as insider trading – that is, securities transactions based on material non-public information (MNPI).[1] Yet there is very limited empirical evidence on whether the law effectively …
In a new article, I answer in the affirmative the question posed in the title of this post. In the United States, we should replace our current regime of muddled and confused insider trading law with a sweeping prohibition …
Last week, the House of Representatives passed the “Insider Trading Prohibition Act” (“ITPA”).[1] Proponents are hailing it as a triumph of bipartisan cooperation. Conversely, critics are calling it the “Insider Trading Protection Act.” This is because the bill codifies …
Experienced litigators know that an adverse appellate decision (even from the U.S. Supreme Court) rarely ends their case. The question is instead: What is the next move? What defenses do we fall back on? So it is likely to be …
Dirks v. SEC established the fraud claim for tipping as part of the insider trading prohibition in the federal securities laws. An essential element of the claim was proof that the insider personally benefited from disclosing confidential information to the …
The law of insider trading generally moves with the speed of molasses in February. For every two steps forward, there is one (or more) steps backward. But this winter has seen a rapid succession of developments. First, the Himes Bill …
For too long, insider trading law has lacked clarity, generated confusion, and failed to keep up with the times. Without a statute specifically directed at insider trading, the law has developed through a series of fact-specific court decisions …
A major issue in United States v. Blaszczak, 2019 WL 7289753 (2d Cir.), was whether the government needed to prove the elements of a Rule 10b-5 tipping violation from Dirks v. SEC, 463 U.S. 646 (1983), when charging …
I am very happy and honored to be back before this committee. I have been asked to comment on several proposed bills, all of which I basically support, but I will focus my limited time today primarily on Congressman Himes’ …
On January 24, former SAC Capital Advisors portfolio manager Mathew Martoma petitioned the Supreme Court to review his 2014 conviction for insider trading. Martoma’s conviction stems from activity in 2008 when he paid a doctor from the University of Michigan …
Did insider trading law almost devolve into an effort to define what kind of relationship a tipper and tippee must have for a defendant to be liable? And was any federal judge or jury qualified to say? Since the Second …
This is a column for insider trading junkies—a special breed who love all the nuances in this very nuanced subject. Late last month, a Second Circuit panel did something fairly unusual: It withdrew a 2017 decision and substituted a new …
2017 was the prototypical transition year for the SEC. In contrast to many other federal agencies under the current administration, the new SEC leadership did not promise a wholesale rethinking of the agency’s mandate. Rather, they seemed to signal minor …
The courts have consistently held since the Supreme Court decided Dirks v. SEC in 1983[1] that tipper-tippee insider trading liability requires proof that the tipper personally benefited from the tip.
This personal benefit test can pose significant challenges to …
In an article forthcoming in the Northwestern University Law Review, I analyze the strategic use of insider trading law to disable the trading activity of an information recipient. I call this phenomenon “insider tainting.” While most tips of information open …
On August 23, 2017, the Second Circuit issued its second significant decision on insider trading liability in the past three years, United States v. Martoma. In its 2014 decision in United States v. Newman, the Second Circuit limited …
The Supreme Court’s decision last December in Salman v. United States[1] settled important issues concerning Rule 10b-5’s reach over trades based on a tip of confidential material information. One important question, however, remains unanswered: In tipping cases based on …
The dominant narrative about Salman v. United States, the first insider trading case decided by the U.S. Supreme Court in almost 20 years, is that it was a big win for federal prosecutors. That is only part of the story.…
The Securities and Exchange Commission announced on October 11 that, in fiscal year 2016, it filed 868 enforcement actions exposing financial reporting-related misconduct by companies and their executives and misconduct by registrants and gatekeepers, as the agency continued to enhance …